In the matter of the adoption of New Rules I through VII, the amendment of ARM 24.29.1401A, the amendment and transfer of ARM24.29.1591, 24.29.1595, and 24.29.1596, and the transfer of ARM 24.29.1593 and 24.29.1599, pertaining to utilization and treatment guidelines, including a drug formulary, for workers' compensation

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NOTICE OF ADOPTION, AMENDMENT, AMENDMENT AND TRANSFER, AND TRANSFER

TO: All Concerned Persons

1. On October 19, 2018, the Department of Labor and Industry (department) published MAR Notice No. 24-29-340 pertaining to the public hearing on the proposed adoption, amendment, amendment and transfer, and transfer of the above-stated rules at page 2010 of the 2018 Montana Administrative Register, Issue Number 20.

2. The department held a public hearing in Helena on November 9, 2018, at which members of the public commented on the proposed rule actions. Written comments were also submitted to the department during the public comment period.

3. The department has thoroughly considered the comments and testimony received. A summary of the comments received and the department's responses are as follows:

Comment 1: One commenter asked when the state expects to have a finalized version of the Montana Utilization and Treatment Guidelines (MT U & T Guidelines).

Response 1: The department implemented the MT U & T Guidelines effective July 1, 2011. Each year, as required by 39-71-704, MCA, the department reviews and updates the guidelines as needed via the administrative rulemaking process.

Comment 2: One commenter asked if the formulary is designed to be two-tiered, incorporating both ODG utilization and treatment guidelines (on which the drug list is based) and the MT U & T Guidelines. If so, the commenter questioned if there is a hierarchy between the two sets of guidelines, and/or the ODG drug list and the MT U & T Guidelines.

Response 2: There is not a "two-tiered" set of guidelines. The only ODG material being adopted in Montana is the formulary developed by ODG. Providers must consult the MT U & T Guidelines for best medical treatment practices and refer to the formulary to determine whether a given medication may be prescribed without the need for prior authorization. With respect to drugs on the ODG formulary list, if the prescription is injury-appropriate and designated as "Y," the prescription does not require prior authorization.

Comment 3: Several commenters are asking for clarifying language in NEW RULE I(1). One commenter asks the department to use "claim or claims" in its definition of a claim because the plural is used elsewhere in the rule. Another commenter stated the definition is missing language because it assumes an insurer has one claim, but in the adjustment of a workers' compensation case insurers have a series of claims. In addition, that commenter noted the rule applies to initial acceptance, but claims an insurer has the right to accept or deny later claims based on evidence.

Response 3: The department concludes that the definition of "claim" contained in NEW RULE I is sufficiently clear. It may refer to a specific individual claim or it may refer more broadly to claims in general, depending on the context of the sentence in which it is used. The department believes that the rules of statutory construction found at 1-2-105, MCA, are applicable to the definition. The department does not construe its definition of "claim" in terms of being "an accepted claim" as affecting an insurer's rights to make claims liability determinations as established by law.

Comment 4: A commenter stated the reference to "Appendix A" should be removed from NEW RULE I(10) because as the result of ODG's merger with MCG, the document is no longer referred to as "Appendix A."

Response 4: The department has amended the rule accordingly.

Comment 5: A commenter stated that moving definitions from ARM 24.29.1401A will cause confusion and will inadvertently remove definitions from a section to which they still apply.

Response 5: The department generally disagrees with the commenter but acknowledges that the definition for "evidence-based" should remain in ARM 24.29.1401A, and has amended the rule accordingly. The department believes the definitions removed from ARM 24.29.1401A are (except as noted) no longer used in ARM Title 24, chapter 29, subchapters 14 and 15, because of the transfer of the MT U & T Guidelines rules to subchapter 16.

Comment 6: Commenters stated NEW RULE IV(5) would be less disruptive to an injured worker to have their drug therapy start with a Y drug from the outset, rather than have their therapy disrupted outside the seven-day window because the injured worker was given an "N" status drug within seven days of injury.

Response 6: The department has considered the reasons for and against allowing "N" status drugs to be used within the first seven days of the occurrence of an injury. The department notes that only a limited number of prescription drugs are specifically identified as having an "N" status on the formulary list. The department recognizes that in some cases an "N" status drug may be appropriate for short-term use, but not for a long-term therapy. The department assumes that medical providers will become familiar with the formulary list and can weigh the advantages and disadvantages of prescribing an "N" status drug in the first week following the injury. The department concludes that there will be minimal disruption of care for injured workers by allowing (where appropriate in the judgment of the provider) a limited number of days' worth of "N" status drugs.

Comment 7: A commenter stated NEW RULE IV(5)(b) should include clarifying language that prior authorization exemptions for the initial first fill do not apply to drugs listed under (6)(b), (c), and (d).

Response 7: The department does not see a reading of the rule that could reasonably suggest to a person reviewing the rule that prior authorization is not required for any medication described in (6). Accordingly, the department concludes that an amendment is notappropriate andwill not amend the rule as requested.

Comment 8: A commenter asked if utilization review or some other sort of medical review is required to make a prior authorization determination. A commenter noted that because the rule is silent on retrospective review, the commenter is assuming retrospective review is still allowed where adherence to the guidelines might be in question.

Response 8: An insurer must have a reasoned basis for granting or denying prior authorization. The rules do not specify whether a medical provider must be consulted for that decision making. The department concludes that each insurer must use appropriate judgment in responding to a prior authorization request, or else the insurer runs the risk of handling the claim in an unreasonable manner. NEW RULE IV(9) allows, but does not require, an insurer to delegate formulary-related decisions to a PBM.

How and when an insurer engages in "retrospective review" of medications is a matter of the insurer's claims-handling practice. To the extent the commenter is suggesting that an insurer can, at some distant future date, demand a refund for payments made to a pharmacy for a medication the insurer deems inappropriate, the department notes that demand may be incompatible with the requirements of the Montana Workers' Compensation Act, if it results in the injured worker being liable for paying for those medications. If the commenter is only asking whether it can review prior medications when making decisions about future care for that injured worker, then the department's rules do not prohibit that claims-handling practice.

Comment 9: Three commenters asked for clarification in NEW RULE IV(7) because it was unclear when the three-day timeframe begins. One commenter stated the timeframe should be three days from receipt of the request for prior authorization from the insurer.

Response 9: The department agrees with the comment and has modified the rule as suggested.

Comment 10: Two commenters stated that NEW RULE IV(4) should be changed to read "Insurers who have a claim shall pay…"

Response 10: The department believes that it literally goes without saying that an insurer cannot have a present obligation to pay for a claim it does not have, and the department's rules are written in the context of the insurer having received the particular claim in question. NEW RULE IV does not purport to impose on an insurer an obligation to pay anything when no claim is involved. The department concludes that the definition of "claim" provided in NEW RULE I is sufficiently clear that a claim exists when an insurer has accepted liability or is paying under a reservation of rights.

Comment 11: A commenter stated the language of NEW RULE IV fails to take into account that each claim is actually a series of claims, and an injured worker may actually have an injury-appropriate medication prescribed, not because of an injury but because of other intervening causes.

Response 11: The department recognizes that in the course of administering a workers' compensation or occupational disease claim an insurer may be faced with determining whether specific medical treatment is or is not related to the claim and whether the insurer will deny liability for that specific service or item. The department concludes that the definition of "claim" provided in NEW RULE I is sufficiently clear for the purposes of the MT U & T Guidelines.

Comment 12: A commenter stated that a payment made pursuant to NEW RULE IV on an accepted claim could affect the frequency and modification factor and possibly Medicare Set Aside.

Response 12: The department agrees with the statement. All payments made on an accepted claim can affect underwriting factors. To the extent the commenter intended to refer to claims for which liability has not (yet) been accepted, the department believes that the formulary rules do not change how or whether an insurer decided to accept liability on the claim.

Comment 13: One commenter stated that the "forced authorization" under NEW RULE IV(7)(b) potentially violates the rights of the insurer to pay under reservation of rights as outlined in 39-71-608 and 39-71-615, MCA, and could force an accepted claim prior to the time allowed under statute to investigate and accept or deny a claim. The commenter suggests that the issue could be remedied if it is added that any payment made due to an automatic approval is done under reservation of rights until such time that a claim is accepted or denied.

Response 13: The department disagrees with the characterization of NEW RULE IV(7)(b) as being a "forced authorization." The department recognizes that a request for prior authorization of a prescription medication might carry greater urgency than a request for prior authorization of a medical procedure. The department is also aware of the insurer's duty under 39-71-107, MCA, to promptly handle claims. With respect to concerns by an insurer that it might not have decided whether to accept liability for the claim in its early stages, the department notes that the insurer can deny the request for prior authorization within three days, or the insurer can grant prior authorization subject to a reservation of rights. The automatic approval provisions of the rule can be avoided by merely timely responding to the request for prior authorization. The department concludes that its rule does not interfere with an insurer's rights under the law to investigate a claim.

Comment 14: Two commenters requested changes to language in NEW RULE V. One commenter believes a new (2)(f) should be added to notify the injured worker that an appeals process is available if they are denied coverage because of the change to their prescriptions under the new formulary. Another commenter stated (2)(d) should be changed from claims examiner to "person or persons designated by the insurer to discuss transitioning of legacy claims with the injured worker and treating physician on the insurer's behalf."

Response 14: The department considers the document described in NEW RULE V(2) to be an announcement of a possible upcoming change to medications the injured worker is presently receiving. The document does not represent a decision by the insurer with respect to benefits. If after reviewing the medical recommendation and documentation provided by the treating physician the insurer makes a decision to deny a drug not listed on the formulary with a "Y" status, the department concludes that the required notice of "appeal rights" should be provided at that time. The department concludes that including "appeal rights" language prior to that occurrence is likely to cause unnecessary confusion and concern on the part of the injured worker.

With respect to the suggested change to (2)(d) contact information, the department concludes that pursuant to 39-71-107, MCA, the appropriate contact regarding the claim is the in-state claims examiner. As a matter of clarification, the department has amended the authorization (AUTH) citation to include 39-71-107, MCA. The department believes that if an insurer wants to provide an additional or supplemental contact regarding formulary matters, it may do so, but that the notice must be clear as to the identity of the claims examiner responsible for the claim.

Comment 15: A commenter is concerned, under NEW RULE V(7), what happens to the injured worker if the treating physician doesn't respond.

Response 15: The department believes that it is unlikely that a treating physician would ignore the physician's responsibility to the patient and fail to respond. The department notes that it expressly provides that the physician's time spent in developing a treatment plan or other response is to be paid on a "by-report" basis. However, if a treating physician refuses to respond, despite follow-up requests from the insurer, the department recognizes that an insurer might decide the physician has abandoned the role of "treating physician." In such an instance, an insurer is potentially justified in designating another qualified individual to serve as the injured worker's treating physician. The department expects that such instances will be quite rare, however.

Comment 16: Several commenters asked for clarification under NEW RULE V(9) and (10), as to whether an insurer is required to pay for supportive services more than once if the injured worker was unsuccessful in the first round of treatment. In addition, one commenter believes language in (10) imposes a different definition of primary medical services than is provided by statute.

Response 16: The department notes that various physical medicine treatments, including courses of physical therapy and even surgery, sometimes need additional courses of treatment in order to get the medically desired result. Insurers routinely pay for such treatments and procedures. The department concludes that the same principal would apply to the provision of supplemental services – what medical services are reasonably necessary for the injured worker? To the extent that an injured worker's drug dependency arises out of the treatment received as a result of a compensable injury or occupational disease, the department concludes that treatment for that drug dependency falls within the definition of "primary medical services" as defined in 39-71-116, MCA.

Comment 17: One commenter believes there needs to be clarification between NEW RULE VI(1) and (2). The commenter stated there is no conjunction between the "only" in each section and without that there could be an excessive burden on the department's medical director.

Response 17: The department intends that (1) and (2) be read together. In response to the comment, the department has amended NEW RULE VI(1) and (2) to make that clarification.

Comment 18: A commenter contends pursuant to NEW RULE VI(7) and (8), a new point of evidence has been created by the department under expediated case review for prescriptions. One commenter suggested if there is evidence created in this process, such evidence must be bi-directional, and it is inappropriate to treat the two outcomes differently. The commenter suggested that (7) should be stricken from the rule, or alternatively (8) should be changed to allow the same evidence creation in the event the expedited review does not find the likelihood of a "medical emergency."

Response 18: The department believes that the opinion of the medical director related to the issues presented in an expedited case could be offered in evidence by any party to the dispute. In order to clarify the matter, the department has amended the rule accordingly.

Comment 19: A commenter believes the department's medical director is not qualified to evaluate the legal defenses of non-work-related problems, notices, or claim filings. In addition, the commenter believes the medical director's report is not admissible in the Worker's Compensation Court because this court is governed by rules of evidence and the department doesn't have the authority to indicate what may or may not be admitted.

Response 19: Nothing in NEW RULE VI(7) compels any tribunal to admit inadmissible evidence. NEW RULE VI(7) allows a party to offer the findings of the department's medical director into evidence but does not restrict any other party's rights to make foundational or other evidentiary objections to that proffered evidence. The department concludes that the rule does not infringe upon the authority of the Workers' Compensation Court to admit proper evidence and reject improper evidence.

Comment 20: One commenter asked if the term "expedited case review" as used in NEW RULE VI refers to "utilization review."

Response 20: No. As noted in Response 8, "utilization review" and "retrospective review" are internal claims-handling processes developed by an insurer. The expedited case review provided for by NEW RULE VI recognizes that there may be situations where the insurer has denied a previously prescribed medication and there is concern that the denial will create a medical emergency for the injured worker. The department's medical director will conduct a medical review and offer an opinion on the matter.

Comment 21: Two commenters believe language under NEW RULE VII indicates disputes between injured workers and insurers go directly to the Workers' Compensation Court instead of mediation first and asked why the department is trying to impose its rule on what the legislature has already decided.

Response 21: The department concludes that the commenters appear to have misunderstood the language in NEW RULE VII. As provided in (2), disputes are handled as provided by statute. Section 39-71-2905, MCA, provides that the mediation requirements be fulfilled before the Workers' Compensation Court may hear the matter.

Comment 22: One commenter asked for clarification surrounding appropriate medication handling for dates of injury prior to July 1, 2007. Do these claims only follow ODG and what formulary rules would apply to these claims?

Response 22: As provided by ARM 24.29.1596 (now renumbered as ARM 24.29.1604), the MT U & T Guidelines apply to dates of injury occurring on or before June 30, 2007. Accordingly, the drug formulary (which is part of the MT U & T Guidelines) can be applied to those pre-July 1, 2007 claims, so long as the insurer triggers the provisions of the drug formulary as described in NEW RULE V. Those older claims are generally referred to as "legacy claims." See NEW RULE I(7), defining legacy claims. NEW RULE II(2) explains the applicability date of the formulary rules, while NEW RULE V specifically discusses the provisions for transition of treatment of legacy claims. The department notes that only ODG's drug formulary list is used in conjunction with the MT U & T Guidelines, and the treatment guidelines published elsewhere by ODG are not used in Montana. See also Response 2.

Comment 23: One commenter asked if the department would be defining an appeals process after the denial of a medication.

Response 23: Dispute resolution procedures applicable to an insurer's denial of a medication are identified in NEW RULE VI and NEW RULE VII. If those procedures do not resolve the dispute, the dispute is handled as any other dispute over benefits would be handled.

Comment 24: A commenter questioned why the department was proceeding with a workers' compensation drug formulary at this time, as opposed to waiting to present something to the next legislative session.

Response 24: To the extent that the commenter is suggesting that the department should seek express legislative approval for adoption of a drug formulary, the department concludes that the 2017 enactment of Chap. 433, L. of 2017 (Senate Bill 312), is an indication that no further formal legislative approval is required. The department was given express rulemaking authority to proceed with the adoption of a drug formulary by rule. In addition, the department believes that many stakeholders in the workers' compensation arena want the department to adopt a drug formulary sooner rather than later. Finally, the department, through its staff, announced its proposed timeline for the adoption and implementation of formulary rules to stakeholders and the department wants to fulfill that commitment.

(a) the insurer shall respond within three business days of the receipt of a request for prior authorization being made to the insurer or the insurer's designee, by either approving or denying the request; and

(1) Expedited case review is available only when insurer declines to authorize further dispensing of an already prescribed medication and halting the supply of that medication appears likely to result in a medical emergency.

(2) Expedited case review is only applicable in cases of medical emergency. A medical emergency occurs when all three of the following circumstances are present:

(a) through (6) remain as proposed.

(7) If theThe findings of the medical director determine thatregarding whether or not a medical emergency is likely to occur as the result of not providing the further dispensing of medication as prescribed by the treating physician, those findings may be offered in evidence in mediation or the Workers' Compensation Court.

7. The department has amended the following rule as proposed, but with the following changes from the original proposal, new matter underlined, deleted matter interlined:

24.29.1401A DEFINITIONS As used in subchapters 14 and 15, the following definitions apply:

(1) through (13) remain as proposed.

(14) "Evidence-based" means use of the best evidence available in making decisions about the care of the individual patient, gained from the scientific method of medical decision-making and includes use of techniques from science, engineering, and statistics, such as randomized controlled trials (RCTs), meta-analysis of medical literature, integration of individual clinical expertise with the best available external clinical evidence from systematic research, and a risk-benefit analysis of treatment (including lack of treatment).

(14) through (39) remain as proposed, but are renumbered (15) through (40).

9. During preparation of this document, the department noticed that numbering errors were made in the proposed amendments to ARM 24.29.1596 (now ARM 24.29.1604) in that the new numbers for existing rules were inconsistent with the new numbering for those same rules as shown elsewhere in the proposal notice. To correct these numbering errors, the department has amended and transferred the following rule as proposed, but with the following changes from the original proposal, new matter underlined, deleted matter interlined:

24.29.1596 (24.29.1604) APPLICABILITY OF UTILIZATION AND TREATMENT RULES (1) The following rules are subject to the applicability provisions of this rule:

11. The department advises all interested persons the above rule changes are effective January 1, 2019, but notes that some of the new rules have a delayed applicability date as stated within the text of the rule.

For questions regarding the content, interpretation, or application of a specific rule, please contact the agency that issued the rule. A directory of state agencies is available online at http://www.mt.gov/govt/agencylisting.asp.

For questions about the organization of the ARM or this web site, contact sosarm@mt.gov.